Professionals can help you weather April's showers

April 15 brings out the whines — even if a refund is due. With more than 30 years of experience as a tax preparer, Carla Stevens suggests that taxpayers stay organized and see a professional.

Co Leber

April 15 brings out the whines — even if a refund is due.

With more than 30 years of experience as a tax preparer, Carla Stevens suggests that taxpayers stay organized and see a professional.

“Once a tax return is finished (by a professional), (the taxpayer) can use it as a guide,” says Stevens, 52, who is a member of the National Association of Tax Professionals.

A professional also can help the taxpayer navigate the ever-changing world of tax rules. Stevens, for example, points to a question we might never ask in everyday life: What’s a “child?”

“Look at the child tax credit for a qualified child. What is a child? Who is your dependent?” she says.

The IRS, of course, has the answer. Starting in 2005, the IRS developed a set of rules establishing the definition of a qualifying child and a qualifying relative.

As far as record-keeping, Stevens says the IRS recommends keeping all records until the statute of limitations runs out — but even that comes with a caveat.

“It limits when they can come back and audit your return — sort of. If they feel that fraud was involved, they could audit your records anytime.

“Usually, the limitation is three years from the date the return was due or filed or two years from the date the tax was paid, whichever is later,” she said. “But you should keep some records longer than that such as those referring to property or business-related returns or stocks and bonds.”

Just to fill in income and adjustments, you need W-2 forms and various 1099s and, if they apply, records such as student loan interest, penalty on early withdrawal of savings (CDs), moving expenses and educators adjustments. In each, there are qualifications.

If you think about itemizing, these are among areas and records necessary:

“(Medical expenses) might seem easy, but it is not,” Stevens says. “For example, cosmetic surgery for vanity is not included, but for accident or deformity it is; prescription drugs are allowed, but not OTC items.”

She suggests holding on to receipts for dentist, orthodontist and eye care expenses — and remember that flex accounts cannot be deducted if they have never been taxed.

All the qualifying medical expenses must exceed 7.5 percent of your adjusted gross income, which is the sum of your income and adjustments.

Stevens recommends putting all such receipts into a medical file. “Pharmacies often will give you a printout — and for anything medical related, write a check or save the receipt.”

Taxes paid include state income tax or sales taxes, and real estate. Stevens notes that real estate taxes are deductible for all property owned by the taxpayer.

Mortgage interest deduction is only available for a qualified residence, usually your main home and a second home.

Gifts to charity include cash (including checks) and items.

“Of course,” Stevens says, “it is always possible that other changes will be made” in the tax code.

New for 2007 returns:

- Taxpayers must have a written record of all contributions.

- Mortgage insurance premium may be deductible.

- Mileage rate is higher for business travel going from 44.5 cents in 2006 to 48.5 cents for 2007, and medical or move-related mileage going from 18 cents in 2006 to 20 cents in 2007.

- Standard deduction increases from $10,300 ($5,150 for singles) for 2006 to $10,700 ($5,350 for singles) for 2007.

Picking a tax preparer:

- Get a referral from friends, family or co-workers.

- Ask the preparer if he or she will do your return or if it will be turned over to someone else in the office. Will he or she be available for questions? How long will it take? How much is charged?

- Expect a lot of questions related to your return.

- Don’t wait until April to call.

For information:

Go online at irs.gov.

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